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Electronic village is open 325 days a year and stocks and

Electronic Village is open 325 days a year and stocks and sells a particular brand of personal computer. It cost the store $350 each time it places an order with the manufacturer for the personal computer which are valued at $950. After placing the order it takes 5 days to receive the PC which has an annual holding rate of 25%. The store manager estimates that annual demand for the PC’s will be 1300 units with a daily standard deviation of 2 units.

Determine the EOQ and the total cost of ordering at this value.

Calculate the ROP at a 95% service level.

State the ordering policy for this item.

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